Spotify and Apple Music may have another competitor soon—Pandora announced it has reached new licensing agreements with two of the biggest labels in music, Sony and Universal Music. It also acquired licenses from Merlin Network, a company that represents indie labels. The third major label, Warner Music, is not on board with Pandora yet. These new agreements will make it easier for Pandora to launch new streaming services, including a rumored $10 per month on-demand music service to rival Spotify and Apple Music.

As far as the licensing agreements go, the company describes it as a "win-win partnership between Pandora and the music industry." However, the absence of Warner Music is noticeable, and some reports suggest that today's announcement is meant to put some pressure on the label. A source told Billboard that Warner Music is, in fact, in talks with Pandora and close to completing a deal.

The new licenses that Pandora has will make it easier for it to offer paid streaming services that can match the music libraries of Spotify and Apple Music. Pandora could be launching two new services before year's end: the aforementioned $10-per-month service and a $5-per-month service that is more limited but also includes the company's existing free Web radio service.

It's no secret that the music industry will jump at any chance to get customers to pay for music, but Pandora will likely benefit from these licenses and any potential paid subscriptions in another way: music rates. Pandora, being primarily a "non-interactive" music service (Spotify and Apple Music are different since customers choose the songs they want to play), has its rates determined by the Copyright Royalty Board. At the end of 2015, the CRB increased the basic per-song rates by about 20 percent, meaning Pandora and other similar services have been paying more per 100 songs played so far in 2016. If and when Pandora makes the shift to paid music services, it won't have to deal with those CRB rate hikes since it negotiates rates directly with the labels themselves.

Valentina Palladino
Valentina is the Associate Reviewer for Ars Technica, covering all gadgets with a focus on mobile devices and wearables. She has a soft spot for Chromebooks. Twitter@valentinalucia